Frederic Filloux publishes a regular newsletter called the Monday Note. It's generally all about tech and new emerging business models. His latest post, called "Code, on wheels," is about Tesla and the software revolution that is currently underway in the car industry. And it's a good reminder of just how unique Tesla appears to be as a car company and how software is bound to infiltrate all aspects of our economy. Already you're hearing people make a distinction around "pure" software companies. This is necessary because of how ubiquitous it has become.
Here is a a longish excerpt from Filloux's article:
But the ultimate leap in value will be the creation of an application ecosystem. The limit will only be the imagination of app creators. As an example, airport operators are likely to develop apps to manage car traffic and passenger flows. Here is a use case: Your flight departing from San Jose Airport leaves in an hour. Your dual app system — one in your phone, the other in the car — checks the flight status, the gate, and the traffic. It notifies you when it’s time to leave. Once in the vicinity of the airport, the app guides you to the parking space nearest to the gate. An alternative and slightly more futuristic scenario involves you dropping your car in front of the terminal, then letting the autopilot send the car to the long-term parking lot a few miles away (this will soon become feasible as geofenced environments such as airports will be well-suited for Level 4 autonomous driving).
Again, this implies major changes in the way car software is currently handled. These scenarios require the car and the phone apps working seamlessly, exchanging data in real-time with the airlines, the airport, the navigation system of the car, the parking infrastructure, and eventually, the autopilot. We are not there yet, but by that time, the dust will have settled: either carmakers will have developed their own OS — along with the SDKs to foster the development of third-party apps — and/or, tech giants will have taken-over, leveraging their current market positions in the phone sector to impose their own norms. I always thought that Apple had that in mind when it hired legions of engineers for its Titan project and filed applications for self-driving cars to the California Department of Motor Vehicles. I doubt that they completely gave up on the idea of replicating what they achieved for the 500 billion smartphone market with the 3 trillion dollar car sector.
There are many in the planning world who are quick to dismiss autonomous electric vehicles as being more of the same. They're still cars, right? For better or for worse, the internal combustion engine was massively transformational to cities -- just as previous advances in transportation were. But what comes next is still mostly unknown because, even if you assume that autonomy is a foregone conclusion, it's unclear how this and an app ecosystem could change how "cars" function in our cities. What will be the spatial impacts?
It is, however, clear to me that when things do start to really change, it will be because of software.
Photo by Jannis Lucas on Unsplash
A couple of months ago I wrote about the relationship between IPOs and home prices. It was in response to the current wave of tech companies -- most of which are headquartered in San Francisco -- that have gone public or are expected to go public this year (2019). What impact will this have on the city's housing market?
I cited this academic study on the topic, which already discovered a "positive and significant association between local house price changes and firms going public." But today I stumbled upon another interesting study by a San Francisco real estate agent, name Deniz Kahramaner, who happens to also be a Stanford-trained data scientist.
What Kahramaner wanted to figure out was, who tends to buy residential real estate in San Francisco?
So he started with title data and then scraped the internet to try and match up individual buyer names with specific companies and industries. Since not everyone has some sort of public profile and because real estate is sometimes held within a company, he was only able to traceback about 55% of home purchases in San Francisco last year.
Still, the data looks pretty clear. About half of the homes bought in 2018 were by individuals whose employment has roots in "software." The next biggest buyer segment was "finance."
Frederic Filloux publishes a regular newsletter called the Monday Note. It's generally all about tech and new emerging business models. His latest post, called "Code, on wheels," is about Tesla and the software revolution that is currently underway in the car industry. And it's a good reminder of just how unique Tesla appears to be as a car company and how software is bound to infiltrate all aspects of our economy. Already you're hearing people make a distinction around "pure" software companies. This is necessary because of how ubiquitous it has become.
Here is a a longish excerpt from Filloux's article:
But the ultimate leap in value will be the creation of an application ecosystem. The limit will only be the imagination of app creators. As an example, airport operators are likely to develop apps to manage car traffic and passenger flows. Here is a use case: Your flight departing from San Jose Airport leaves in an hour. Your dual app system — one in your phone, the other in the car — checks the flight status, the gate, and the traffic. It notifies you when it’s time to leave. Once in the vicinity of the airport, the app guides you to the parking space nearest to the gate. An alternative and slightly more futuristic scenario involves you dropping your car in front of the terminal, then letting the autopilot send the car to the long-term parking lot a few miles away (this will soon become feasible as geofenced environments such as airports will be well-suited for Level 4 autonomous driving).
Again, this implies major changes in the way car software is currently handled. These scenarios require the car and the phone apps working seamlessly, exchanging data in real-time with the airlines, the airport, the navigation system of the car, the parking infrastructure, and eventually, the autopilot. We are not there yet, but by that time, the dust will have settled: either carmakers will have developed their own OS — along with the SDKs to foster the development of third-party apps — and/or, tech giants will have taken-over, leveraging their current market positions in the phone sector to impose their own norms. I always thought that Apple had that in mind when it hired legions of engineers for its Titan project and filed applications for self-driving cars to the California Department of Motor Vehicles. I doubt that they completely gave up on the idea of replicating what they achieved for the 500 billion smartphone market with the 3 trillion dollar car sector.
There are many in the planning world who are quick to dismiss autonomous electric vehicles as being more of the same. They're still cars, right? For better or for worse, the internal combustion engine was massively transformational to cities -- just as previous advances in transportation were. But what comes next is still mostly unknown because, even if you assume that autonomy is a foregone conclusion, it's unclear how this and an app ecosystem could change how "cars" function in our cities. What will be the spatial impacts?
It is, however, clear to me that when things do start to really change, it will be because of software.
Photo by Jannis Lucas on Unsplash
A couple of months ago I wrote about the relationship between IPOs and home prices. It was in response to the current wave of tech companies -- most of which are headquartered in San Francisco -- that have gone public or are expected to go public this year (2019). What impact will this have on the city's housing market?
I cited this academic study on the topic, which already discovered a "positive and significant association between local house price changes and firms going public." But today I stumbled upon another interesting study by a San Francisco real estate agent, name Deniz Kahramaner, who happens to also be a Stanford-trained data scientist.
What Kahramaner wanted to figure out was, who tends to buy residential real estate in San Francisco?
So he started with title data and then scraped the internet to try and match up individual buyer names with specific companies and industries. Since not everyone has some sort of public profile and because real estate is sometimes held within a company, he was only able to traceback about 55% of home purchases in San Francisco last year.
Still, the data looks pretty clear. About half of the homes bought in 2018 were by individuals whose employment has roots in "software." The next biggest buyer segment was "finance."
The other interesting thing about this data set is that it shows where people have been buying (at least last year). Historically, the north end of the city has been the wealthiest, but the above data shows things moving in a southeasterly direction. Though, it remains to be seen what all of this will look like when the dust settles after this current crop of tech IPOs.
Chart: The Atlantic
I had a friend ask me this week about how I decide what to write on this blog. His comment was that I tend to write about a variety of different topics. He wondered: Isn’t it better to focus on one particular niche?
The simple answer is that I write about what interests me. And secondary to that is any concern around what will get the most clicks. In fact, I try not to fall into the trap of worrying about the latter. Sometimes it can be paralyzing to fixate on what will appeal most to the tens of thousands of people who read this blog on a regular basis.
The reality is that my interests are much broader than, say, just design and real estate; though these two topics are clearly central.
I learned a long time ago while studying architecture and art history that what we make as a society is generally a product of the cultural milieu at the time. In other words, the built environment doesn’t happen in a vacuum. It is the physical manifestation of what we believe to be true at a particular moment.
Today, it’s pretty hard to ignore the importance of tech. Think of some of the most valuable companies in the world right now: Apple, Google, Amazon, Facebook, and so on. Now, technology has always shaped our cities, but what makes this moment different is the decisive shift toward software.
It’s arguably no longer about who can build the best mousetrap. It’s about who can build the best software layer on top of that mousetrap.
In 2011, venture capitalist Marc Andreessen (previously the co-founder of Netscape) published a widely shared essay called, “Why Software Is Eating the World.” And over the past 6 years he has been proven to be very right.
The 3 main points he aimed to make with that essay are as follows:
Every product or service that can become software will become software.
Every company will have to become a software company.
The winning companies will be the best software companies.
Depending on your industry, this may sound ludicrous to you. Certainly in 2011 it probably seemed that way.
But a perfect example of this phenomenon is the iPhone. The phone itself is manufactured in China, albeit where a lot of great hardware innovation is taking place.
But at this point, phones have become fairly commoditized. The profits that Apple makes from the iPhone disproportionately come from the software layer and the app ecosystem it has developed.
You could make a similar argument with Tesla. Autonomous navigation – which most of us can agree will have a profound impact on cities – is largely a software challenge.
And so if you believe that autonomous vehicles will be a fundamental part of the future of mobility, then it’s not that hard to believe in point number three: the winning car company will also have to be the best car software company.
Some industries have been less touched by tech and software – real estate being one of them. But if Andreessen is right and it’s not a question of if, but a question of when, then it behooves all of us to think about the potential impacts.
I love how Andreessen ends this podcast discussion with Barry Ritholtz of Bloomberg and so I’m going to repeat it here to close out this post. He says: “There are no bad ideas. There are only early ideas.”
And that’s why I write about tech on my city building blog.
Photo by Michal Pechardo on Unsplash
The other interesting thing about this data set is that it shows where people have been buying (at least last year). Historically, the north end of the city has been the wealthiest, but the above data shows things moving in a southeasterly direction. Though, it remains to be seen what all of this will look like when the dust settles after this current crop of tech IPOs.
Chart: The Atlantic
I had a friend ask me this week about how I decide what to write on this blog. His comment was that I tend to write about a variety of different topics. He wondered: Isn’t it better to focus on one particular niche?
The simple answer is that I write about what interests me. And secondary to that is any concern around what will get the most clicks. In fact, I try not to fall into the trap of worrying about the latter. Sometimes it can be paralyzing to fixate on what will appeal most to the tens of thousands of people who read this blog on a regular basis.
The reality is that my interests are much broader than, say, just design and real estate; though these two topics are clearly central.
I learned a long time ago while studying architecture and art history that what we make as a society is generally a product of the cultural milieu at the time. In other words, the built environment doesn’t happen in a vacuum. It is the physical manifestation of what we believe to be true at a particular moment.
Today, it’s pretty hard to ignore the importance of tech. Think of some of the most valuable companies in the world right now: Apple, Google, Amazon, Facebook, and so on. Now, technology has always shaped our cities, but what makes this moment different is the decisive shift toward software.
It’s arguably no longer about who can build the best mousetrap. It’s about who can build the best software layer on top of that mousetrap.
In 2011, venture capitalist Marc Andreessen (previously the co-founder of Netscape) published a widely shared essay called, “Why Software Is Eating the World.” And over the past 6 years he has been proven to be very right.
The 3 main points he aimed to make with that essay are as follows:
Every product or service that can become software will become software.
Every company will have to become a software company.
The winning companies will be the best software companies.
Depending on your industry, this may sound ludicrous to you. Certainly in 2011 it probably seemed that way.
But a perfect example of this phenomenon is the iPhone. The phone itself is manufactured in China, albeit where a lot of great hardware innovation is taking place.
But at this point, phones have become fairly commoditized. The profits that Apple makes from the iPhone disproportionately come from the software layer and the app ecosystem it has developed.
You could make a similar argument with Tesla. Autonomous navigation – which most of us can agree will have a profound impact on cities – is largely a software challenge.
And so if you believe that autonomous vehicles will be a fundamental part of the future of mobility, then it’s not that hard to believe in point number three: the winning car company will also have to be the best car software company.
Some industries have been less touched by tech and software – real estate being one of them. But if Andreessen is right and it’s not a question of if, but a question of when, then it behooves all of us to think about the potential impacts.
I love how Andreessen ends this podcast discussion with Barry Ritholtz of Bloomberg and so I’m going to repeat it here to close out this post. He says: “There are no bad ideas. There are only early ideas.”
And that’s why I write about tech on my city building blog.
Photo by Michal Pechardo on Unsplash
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